VANCOUVER, Wash., Oct 26, 2010 (GlobeNewswire via COMTEX) -- Barrett Business Services, Inc. (Nasdaq:BBSI) reported today net income of $3.7 million for the third quarter ended September 30, 2010 compared to a net income of $2.9 million for the third quarter of 2009. Diluted income per share for the 2010 third quarter was $.36, as compared to diluted earnings per share of $.28 for the same quarter a year ago.

Net revenues for the third quarter ended September 30, 2010 totaled $73.9 million, an increase of approximately $8.4 million or 12.8% over the $65.5 million for the same quarter in 2009.

The Company reports its Professional Employer Organization services ("PEO") revenues on a net basis because it is not the primary obligor for the services provided by the Company's PEO clients to their customers. The gross revenues and cost of revenues information below, although not in accordance with generally accepted accounting principles ("GAAP"), is presented for comparison purposes and because management believes such information is more informative as to the level of the Company's business activity and more useful in managing its operations.

(Unaudited) (Unaudited)

(in thousands) Third Quarter Ended Nine Months Ended

September 30, September 30,

---------------------- ----------------------

2010 2009 2010 2009

----------- --------- ----------- ---------

Revenues:

Staffing services $ 33,954 $ 33,180 $ 92,991 $ 85,224

Professional employer

services 298,941 239,872 799,557 663,847

----------- --------- ----------- ---------

Total revenues 332,895 273,052 892,548 749,071

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Cost of revenues:

Direct payroll costs 283,421 231,532 759,690 635,808

Payroll taxes and

benefits 24,501 20,399 71,990 62,460

Workers' compensation 10,917 8,980 29,690 37,196

----------- --------- ----------- ---------

Total cost of

revenues 318,839 260,911 861,370 735,464

=========== ========= =========== =========

Gross margin $ 14,056 $ 12,141 $ 31,178 $ 13,607

=========== ========= =========== =========

Gross revenues of $332.9 million for the third quarter ended September 30, 2010 increased 21.9% over the similar period in 2009.

A reconciliation of non-GAAP gross revenues to net revenues is as follows:

The following summarizes the unaudited consolidated balance sheets at September 30, 2010 and December 31, 2009.

September December

30, 31,

(in thousands) 2010 2009

--------- ---------

Assets

------------------------------

Current assets:

Cash and cash equivalents $ 18,261 $ 36,671

Marketable securities 24,227 13,766

Trade accounts receivable,

net 56,483 33,070

Income taxes receivable 3,898 4,274

Prepaid expenses and other 1,772 979

Deferred income taxes 4,271 4,071

--------- ---------

Total current assets 108,912 92,831

Marketable securities 7,166 7,473

Property, equipment and

software, net 14,929 14,795

Restricted marketable

securities and workers'

compensation deposits 9,305 2,666

Other assets 3,091 3,104

Workers' compensation

receivables for insured

claims 3,610 3,865

Goodwill, net 47,820 47,338

--------- ---------

$ 194,833 $ 172,072

========= =========

Liabilities and Stockholders'

Equity

------------------------------

Current liabilities:

Accounts payable $ 1,042 $ 1,117

Accrued payroll, payroll

taxes and related benefits 52,288 30,244

Other accrued liabilities 370 499

Workers' compensation claims

liabilities 11,018 10,509

Safety incentives

liabilities 4,753 4,437

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Total current liabilities 69,471 46,806

Long-term workers'

compensation claims

liabilities 16,351 14,560

Long-term workers'

compensation liabilities for

insured claims 2,665 2,729

Deferred income taxes 6,322 6,323

Customer deposits and other

long-term liabilities 1,451 1,527

Stockholders' equity 98,573 100,127

--------- ---------

$ 194,833 $ 172,072

========= =========

Outlook for Fourth Quarter 2010

The Company also disclosed today limited financial guidance with respect to its operating results for the fourth quarter ending December 31, 2010. The Company expects gross revenues for the fourth quarter of 2010 to range from $321 million to $326 million, as compared to $270.8 million for the fourth quarter of 2009, and anticipates diluted earnings for the fourth quarter of 2010 to range from $.28 to $.32 per share, as compared to diluted income per share of $.21 for the same period a year ago. A reconciliation of estimated gross revenues to estimated GAAP net revenues for the fourth quarter of 2010 is not included because PEO revenues and cost of PEO revenues for the period are not reasonably estimable.

Conference Call

On Wednesday, October 27 at 9:00 a.m. Pacific Time, William W. Sherertz and James D. Miller will host an investor telephone conference call to discuss third quarter 2010 operating results. To participate in the call, dial (877) 356-3717. The call identification number is 19477114. The conference call will also be webcast live at www.barrettbusiness.com. To access the webcast, click on the Investor Relations section of the Web site and select Webcast. A replay of the call will be available beginning Wednesday, October 27, 2010 at 12:00 p.m. PT and ending on Wednesday, November 3, 2010. To listen to the recording, dial (800) 642-1687 and enter conference identification code 19477114.

Statements in this release about future events or performance, including gross revenues and earnings expectations for the fourth quarter of 2010, are forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could affect future results include economic conditions in the Company's service areas, the effect of changes in the Company's mix of services on gross margin, the Company's ability to retain current customers and attract new customers, future workers' compensation claims experience, the effect of changes in the workers' compensation regulatory environment in one or more of the Company's primary markets, the collectibility of accounts receivable, and the effect of conditions in the global capital markets on the Company's investment portfolio, among others. Other important factors that may affect the Company's future prospects are described in the Company's 2009 Annual Report on Form 10-K. Although forward-looking statements help to provide complete information about the Company, readers should keep in mind that forward-looking statements may be less reliable than historical information. The Company undertakes no obligation to update or revise forward-looking statements in this release to reflect events or changes in circumstances that occur after the date of this release.

BBSI provides a comprehensive range of human resource management solutions to large and small companies throughout many regions of the United States.